Abstract
In the last couple of years, circular supply chain management considered the most significant tool for the circular economy. It supports converting production and consumption patterns from linear to sustainable. Several studies have covered the implementation of circularity in different settings, but no concrete investigation exists that in-depth and explicitly explores the procurement perspective toward the circular economy. Previous studies also highlighted the need to focus on procurement or supply management perspective because it consumed an ample amount of budget in the public and private sector. To fill this gap, this study provides a state-of-the-art analysis to adopt circularity in procurement operations. This comprehensive analysis had done by reviewing the 100 peer-reviewed research papers related to the implementation of circular economy and sustainable procurement. This study not just covered the top-down view of literature but advances the literature by finding 55 barriers and enablers under different clusters. From the output, it is evident that efforts need to be taken from 360-degree stakeholders. However, sourcing strategy and procurement operations need to be revamped. This review unpacks the factors at the micro, meso, and macro-level that help academicians to create a framework for empirical investigation. Similarly, it helps practitioners, policymakers, and decision makers to achieve sustainable development goal (SDG) number 12 by incorporating circularity in procurement.
Introduction
As the concerns of climate change, resource depletion, and pollution are increasingly rising, the notion of the Circular Economy (CE) has come to the fore (Li et al., 2021). To mitigate challenges from unsustainable production and consumption patterns, the CE concept has been receiving increasing attention from policymakers, practitioners, and scholars across the world. The CE focuses on transforming waste into resources, addressing the gap between production and consumption activities (Batista et al., 2018; Witjes and Lozano, 2016) leading to more efficient use of resources coupled with economic growth. Procurement management has a unique ability to contribute to the CE agenda (De Angelis et al., 2018). The research at the intersection of the CE and procurement has significant potential to achieve sustainable development goals (SDGs), as adopted by member countries of the United Nations (UN) in 2015. Circular procurement (CP) can leverage the natural ecosystem, where natural resources can be transformed into manufactured products and the by-products can be used as new resources for other industries (Zhu et al., 2010). Literature has also highlighted the role of public procurement in stimulating CP (Kristensen et al., 2021; Rainville, 2021). In recent literature about reviews on circular supply chain management (CSCM), authors have revealed the urgency to study the integration of procurement and the CE (Farooque et al., 2019b; Lahane et al., 2020).
Every year, the only European Union (EU) spends around 2 trillion Euros on the purchase of materials and services. Public procurement of the EU is around 14 % of GDP. The public sector in the UK spent £357 billion in 2020/21 for the procurement of supplies, work, and services and the USA spent more than $665 billion on its public procurement. All countries are spending approximately 12 to 22 % of GDP. Keep in mind that these values are not covering the procurement by the private sector. Nevertheless, the problem is not the amount, but the concern is the depletion of natural resources. Moreover, the estimates of gains from a CE are significant. The European Commission estimates that the manufacturing sector would gain 600 billion euros annually (European Commission, 2014). The global economy would benefit by 1000 billion US dollars annually (Grafström and Aasma, 2021). In contrast, a CE can help in generating 50,000 jobs and €12 billion investment in the UK (European Commission, 2014). Despite potential gains, CE implementation is slow in practice and actions are stifled by various barriers (Ghisellini et al., 2016; Govindan and Hasanagic, 2018).
Nevertheless, CP is at an emerging stage and environment-friendly procurement is not new. Over the last decade, researchers have explored sustainable/green procurement practices and strategies. This body of knowledge serves as a formidable foundation to make the next step toward CP (Sönnichsen and Clement, 2020). CP is different from previous types of procurement. Sustainable procurement (SP) and green procurement (GP) always strives for environment-friendly material, but CP strives to regenerate, reuse, rework, redesign, reduce, recycle, remanufacturer, and repair to achieve zero-wastage. CP aims to give new life to materials and new industrial connections across the different supply chains. Typical environment-friendly procurement does not encompass the new loops to eliminate the waste. Many studies have revealed the implementation issues of GP and SP, so implementation of CP required a major overhaul in the supply and procurement function.
The literature has seen growth over the past decade, yet it is scattered. Sönnichsen and Clement (2020) reviewed the transition from GP/SP to CP from organizational and operational aspects. However, that study didn’t cover the comprehensive analysis of barriers and enablers and that was limited to public procurement only. Similarly, Govindan and Hasanagic (2018) explored 39 barriers of supply chain in implementing CE but only few covers the procurement aspect. Additionally, more than 15 review studies have been conducted on the implementation of CE across the sector, industry, and geographical location. But all the review studies have focused on general aspect instead of procurement. Bressanelli et al. (2021) examined the enablers and benefits of the CE in the electronic and electrical supply chain, but it focused more on the technological part of the industry. Grafström and Aasma (2021) comprehensively investigated the barriers of the CE, but only at the macro level including market, technological, institutional, and cultural areas.
Motivated by these considerations, the present study integrates the literature of SP, CE, and CSCM. This study attempts to offer detailed state-of-the-art literature to identify the barriers and enablers of CP and provide guidelines for future research on this topic. The basic notion behind a systematic review is to systematically collect available evidence from a larger pool of publications to rationalize the problem and identify new lines of inquiry. Two research questions have guided this research process.
RQ1: What are the existing definitions of circular procurement?
RQ2: What are the barriers and enablers to achieving circular procurement?
This research makes several original contributions. First, it contributes to the literature by advancing the theoretical understanding of circular procurement – a new sustainability frontier beyond traditional procurement sustainability paradigms. Second, the research proposes a framework drawing on multiple organizational theories to identify barriers to integrating the CE and procurement. Third, to the best of our knowledge, this is the first research attempt to systematically investigate the barriers and enablers in the CP context. Fourth, this research provides a multi-stakeholder analysis of barriers and enablers that go beyond the dominant focal firm viewpoint to a dyadic supply chain perspective. Finally, this study offers practical insights to integrate sourcing strategy and the procurement process with the CE referring to the Kraljic matrix. It also sheds light on which organizational theories are most suitable for guiding similar studies. Furthermore, the answers to the stated research questions would help managers and scholars to understand and adopt CP. Policy makers across sectors and industries would be able to promote enablers and curb barriers of CP. The study opens new research avenues for scholars because CP is the tool to achieve Goal number 12 of the SDGs’ particular target of 12.7. The present study is unlike a typical systematic literature review (SLR); it aims to reveal the problems and solutions based on published data. It does not only contain the eagle eye view of relevant literature. RQ1 is significant for readers to have top-down view of the CP and addresses the need for a definition in the literature to cover both public and private sectors. RQ2 is highly fruitful for practitioners to formulate strategies and polices and is also beneficial for scholars to further investigate each barrier and enabler empirically.
The remainder of the paper is structured as follows. Section 2 covers the methodology, especially the protocol of the review process. Section 3 describes the results, it contains the definition, barriers, and enablers of CP with descriptions and multi-factors framework. Section 4 discusses the findings based on research questions, implications, limitations of the study. Section 5 concludes the research by covering the major findings, recommendations to key stakeholders and future research insights.
Conclusion
The increasing pressure of resource depletion and the growing population make it obligatory to shift from the traditional linear model to a circular economy. Scholars strongly advise exploring the implementation of the CE with respect to different functions. The procurement function consumes huge financial resources and is directly responsible in leading the chain. Therefore, with this great need, a systematic literature review of 100 articles was performed to understand the concept of circular
References
Conceptual framework for integrating environmental sustainability into supplier selection in procurement decisions
Exploiting the potential of public procurement: opportunities for circular economy
